The BA Q and A: How to Invest a Windfall

us would just be in the background awkwardly two stepping. Okay, that was me, But we are here with the va qa. I can't wait to answer some of your questions, and y'all have been sending us so many, keep them coming. Hit us up at Brown Ambition Podcast on Instagram, or you can email us at Brown Ambition Podcast at gmail dot com, or skip on over to Brown Ambition Podcast

dot com. You can check out not only were to submit a question through our website, but also cepast f episodes and coming soon, I'm finally gonna have transcripts for y'all because you've been asking for seven years, and I took my damn time, but they're coming. All right, Okay, well let's jump in. Let's see what kind of questions we've got from today. All right, Amanda, Hey, name twin. Amanda says. One of the first episodes of Brand Ambition I heard was was your interview with Jamila su Front

from Journey to Launch. You both mentioned that you use online savings accounts. I'm wondering if there's any particular account

that you would recommend. Hey, Amanda, thank you for your question. Listen, the same way that I talk about not being loyal to any one particular employer, because you know they'll drop you in a minute anytime they want to, I feel the same way about bank accounts, because, honestly, bank accounts, I feel for a lot of us, you know, we get the first bank account when we're like, I don't know, old enough to have a job, sixteen, seventeen, eighteen or

after college, and then we just kind of stick with it for years and years and years, even when it may be the worst thing for you financially. And because of the growth of online savings accounts and online banks in general, if you haven't looked at who you're banking with, and then the last I don't know, three to five years. It's definitely worth taking a new look and potentially switching

banks if you were finding better deals out there. So I think the fact that you're asking this question is great. I think everyone should be shopping for the best bank account on a regular basis. There's a couple of things that you should be looking for, especially when it comes to online savings. Yes, you want to find the highest interest rate possible, because this is the money that banks are paying you to let you park, for you to

pick their bank to park your money at. Because of the pandemic, and because the FED has increasingly decreased rates, I was a little confusing. Why did I say it that way? Because the FED kept slashing rates through the pandemic, that directly impacted savings rates, so we saw savings rates just plummet. I mean, they're pretty crappy these days. So even the highest high yield savings accounts are not that amazing. So what's become you know, that's become an important factor,

but like less important. So I would also look at things like minimum balance requirements, and then just for your own convenience, you know, how do they make it? Do they make it easy for you to transfer funds to your savings accounts so you can continue growing that fund? Do they charge things like do they charge fees for withdrawals? Do they charge you a fee for not keeping a minimum balance? Like look at all that fine print. But yeah, like I said, rates are not that sexy right now.

So a couple of years ago, it was like two percent, you know, which was actually really amazing, and now it's just so abysmal. Particularly which banks do I recommend? There's a bunch out there. I could list off any any of them. There's vo v Roo, There's Chime, there's Ally, of course there is Oh my gosh, oh Marcus by Goldman Sachs AMX has a decent online high yeld savings accounts.

The point is it's never been easier to go online and shop and compare bank accounts and see which ones offer which you can actually go to my former employer, I still love them, Magnifi money dot com. This is a place where you can actually go to and compare savings account rates right in one place, and you can kind of see what all the different banks were offering. So if you're on the fence. Start with a site like Magnifi money dot com. You can also check out

nerd wallet. There's just so many options. Google is your friend. Okay, all right, thank you for your question, Amanda. All right, moving along, we have a question from listener Ali. She says, I'm thirty nine years old and I'll be turning forty next December. I feel like I'm extremely behind on my journey to become financially independent. I have about eighty five thousand dollars in student loan debt, five thousand dollars left that I owe on my car, and eight thousand dollars

in credit card debt. I've been listening to your podcast on the Fire movement and I calculated my fire number and it's almost five hundred thousand dollars. I make forty five thousand dollars right now per year, and I rent my house. How do you start working on financial independence when you're late in the game. Can I start at forty? Is it too late? I really feel like I'll be one of those who'll be working forever. What advice or suggestions do you have for people who are starting in

their forties. Also, I have a photography business. But it's not making a lot of money, so it's a hobby until I feel like I can improve and meet my target audience. Hey, Ali, all right, I feel the stress here. I feel the anxiety. Forty is not that old, Ali. You are fine. You are so so fine, and honestly, it sounds like you're not even in as dire shape as you may think. Okay, yes you have some student loan debt, and yes that eight thousand dollars of credit

card debt that is concerning, but it's not insurmountable. And I think, stop worrying about your age so much and just start making small decisions today that can put you on that track toward a big goal. I know that you've went in and calculated your fire number, and for those of you who aren't listening, you can google around and find like a fire calculator. A really easy rule of thumb is to take your household income and then multiply it by twenty five I think, to get your

fire number. But what you'll find is, like people like Ali, for example, you get that fire number, so hers is fift five hundred thousand dollars, and then you're like houseway where the math is not math thing. How do I actually get there? And that is where the fire number I think can be a little bit. I don't know, it can It can sometimes do more damage than good. It's nice to know where you want to end up, but you also need to realize that it's going to

take you time to get there. It's going to take time and small decisions every day. So Ali, if we're going to sit down and look at your finances, you know, how much money do you have left over after you're paying your expenses and how much more can you be

putting toward that credit card debt that you've got. Are there things that you could be doing to pay that down, like taking out a debt consolidation loan, for example, or doing a balance transfer where you're transferring credit card debt to a new credit card that's off for you some sort of promotional rate like zero percent for twelve months or something like that, Because I definitely want you to

get that credit card debt down. At the same time, you say that you have a photography business and that it's a hobby, and it sounds like you're working nine to five. At the same time, I would look at some ways to increase and better monetize your photography business. It could be that maybe you're looking at traditional, you know, sources of income for your photography business, which could be,

you know, weddings, I don't know, events. Are there types of photography that you could, you know, start offering that people are looking for, even just looking at who your target audience is and what is it that they're asking for. I know all the time I have clients of mine who are looking for professional headshots. Oh my goodness, now

that I'm a mom. I don't know if it's just because I'm a mom now or if this is happening more and more, but I feel like there every month there's a new reason to do a photo shoot for a baby or for kids. So maybe it's family photos.

But what different types of photography can you start getting into to actually increase your business Or it may not be necessarily the types of photography that are your passion, but could you do some commercial photography or could you use your skills to support an events planning firm or like a wedding planning firm who is looking to have a photographer you know on speed dial so that they

can use them for different events. Really start working your network, asking people, asking fellow photographers for advice on how to increase your income. It may feel like it's outside your

comfort zone. But when I talk to women, especially who are feeling stuck, like in their career or with their business and like they're not able to get to that next level time and time again, the real magic, the real key for them is talking to other people and talking to people who are either in their business or understand their business really well. So who's actually on your

like what I call personal advisory board? Who can you talk to fellow photographers, people who are in the space and work with photographers, and just really start asking questions. You know, here's my business model. Do you have any ideas this is the type of photography that I'm doing? But what are you seeing clients or you know, clients asking for Because the key for you, you know, you say, you're making forty five thousand dollars a year and you've

got this debt. So I feel like the key for you is not so much scrimping and you know, budgeting and maybe that is part of it, decreasing your expenses, but you're gonna also want to actually ratchet up your earnings so that's why I'm like immediately going to that photography business and wanting you to like really push yourself to find ways to better monetize it so that it can become, you know, a more meaningful source of income to not only paid on your debt, but also get

you moving toward fire. And then you know, the key to fire is not about squirreling away money into a safe means account that's just going to sit there and barely beat inflation. I mean, especially with inflation right now, there's no way in hell y'all that any savings account, no matter how high yield it is these days, is ever gonna come close to beating inflation. So it's more important than ever to learn about investing and to learn how to invest for long term growth. I highly recommend

checking out Our Rich Journey. That's Christina and Amman. We had them on the show before. They have a wonderful YouTube channel with so much content, so much educational content, and they specifically have an episode all about fire after forty okay, allie, So I feel like I need to go dig up that episode and just send it to you, because they truly prove that it's possible and they honestly, you know, were able to save and increase their income to the point where they could retire early. And they

are the real deal. So I love Christina and a Mon from our Rich Journey and I feel like they'll really inspire you to not get so tied up in your age and what that can mean for you. Okay, I hope that was helpful. Thank you so much again, Ali for your question. We are going to take a quick break and I'll be right back with more Baq and A. Hey, Hey, ba fam. All right, I am back with our last question for Baq and A this week. Again.

If you want to send us your questions, hit us up Brondambission Podcast at gmail dot com or go to Instagram. We are at Brandabission Podcast. All right, this comes from anonymous. Anonymous says, I am thirty four years old. I have a I have an old four oh one k from a previous job with about ninety thousand dollars in it, and I just opened up a roth iray that basically has nothing in it. Yet I'm about to get a windfall of five thousand dollars soon and I'm wondering what

I should do with it. I have about thirty thousand dollars in student loan debt, and I'm wondering if it'd be better to take that five thousand dollars and add it to that, or pay use it to pay down that student loan debt, or put that five thousand dollars into my roth iray. I'm excited to start contributing to my wroth as much as possible, and I hope to be able to max it out this year. Okay, I'm not sure which way to go, all right, excellent questions.

So she does specify in her note here. I was trying to summarize it that this is federal student loan debt, which means until I believe May of this year, you're not actually owing anything on that federal student loan debt. Which you know, if you take that five thousand dollars and you use it to put it toward your student loan debt, that's, you know, potentially great because you're not having to worry about any additional interest. So all that

money is going toward your principle, which sounds good. But let's think a little strategically here. Your wroth iray is an excellent vehicle to start investing and growing your wealth. Right, you've got your four one k from your previous job. I'm going to assume that you're contributing to your four to one k from your current job now, and that your roth iray is really for wealth building. You have five thousand dollars coming and this is this is my

personal opinion, this is what I would do. I honestly would take that five thousand and put that into your roth thigh array and let that start working for you. Your interest rate on your federal student loan debt, you say, is about six percent, but history has shown the stock market will beat that rate. Of course, you can never predict what the stock market does. But you're thirty four

years old. You've got plenty of time to recover and plenty of working years to recover from any you know, downturns in the market in the future, which will always come. The market just goes up and it goes down, and it goes up and it goes down. It's just how it rolls, okay, But personally, I would say, a nice little windfall like that, go ahead and invest it, and then make sure that you've got a payoff plan for your student loan debt. You've got thirty thousand dollars that

you're working to pay down. You're thirty four years old. You were able to save you know, ninety thousand dollars in your four to one K, So that tells me that you've got money on the side that you can start pumping toward, you know, that student loan debt payment and really get that paid off not that long you know, down the road from now. So that is my opinion. Again. I really feel like when it comes to wealth building,

the sooner you start, the better. And when you've got an opportunity like this windfall and you don't have things like a bunch of credit card debt, which you say you don't have, it doesn't sound like you're struggling to meet other expenses, you know. I hope you've got a

little bit of a savings fun on the side. But if all those things are true, and you've got this five thousand dollars coming to you and the federal student loan bill is not going to be due at least until after May of this year, girl, I would just invest that and let that money start growing for you. Okay. Again, personal opinion. Not a financial advisor. Not your financial advisor, but that's how I'm feeling. I'm feeling a little very bullish on investing right now. Okay, so thank you so

much for your question, Anonymous. And that is it, y'all. I am Mandy again with Brown Ambition. Thank you so much for listening and supporting the show. Listen y'all. If you want to really support us, why don't you go to iTunes right now, leave us a five star review, take us shot and post that ish on Instagram. Okay, tag us at Brown Ambition Podcast. You can tag me at Mandy Money. We will reshare it. I will give you all the heart emojis. It merely does mean a lot.

Not only does it help us on the rankings on iTunes, but it also tells people or sorry Apple podcasts, but it also helps tell people more about our show and help spread the word. So we really appreciate your support and thank you again. Until next week. This is Mandy with Brown Ambition. Thank y'all again for all your support. Can I just say that I really miss Tiffany? All right, I'm done now